US Consumer’s Uptrend is Officially on the Radar

Monday I wrote a post regarding American consumerism being on the rise during times where the jobless numbers are still unsteady.

Well, I wasn’t the only one to recognize the definitive upward swing of US Consumerism, after all consuming is what we do best.  /:|

James Politi and Jonathan Birchall bylined an article in today’s (4/1/2010)Financial Times called “Consumers Display Stronger Vital Signs“.  You can view the article using  a free membership or I can condense it here:  Americans are slowly, but surely starting to spend more discretionary income.  Ta da. 

There was a quote in the article that, though I agree with heartily, gave me pause. 

Here’s the quote: 
“To drive recovery, US consumer spending would have to increase to at least 4 per cent this year.  …’I don’t think we should expect the consumer to be a leader at any stage in the recovery,’ said Nigel Gault, chief US economist at IHS Global Insight.”

Here’s the agreement: 
Darn tootin!  Especially when the economic crisis is due, in large part, to irresponsible business practice, legislation (or lack of regulation) and we’re already paying out the nose through the bailout. 
(I’m leaving out the expense of the wars we’re involved in.)
American’s savings are going up, our consumer debt is going down and we deserve a chance to get our feet back under us after learning the cold, hard truth about what it means to live beyond our means without being guilted into spending our hard earned cash to help spur the economy.  You broke it, you fix it. 
Not to mention the fact that one of the biggest underlying problems here is that the US stopped innovating and manufacturing and has been happy to let the rest of the world do the work while we merely consumed, consumed, consumed….returning to that model would seal our doom, in my opinion. 

Here’s the devil’s advocate: 
Maybe it is appropriate to shoulder some of this responsibility.  After all, we were the ones who turned a blind eye when legislation was passed to incentivize business who take our jobs overseas, we also have agreed (by lack of disagreement) to the deregulation of the banking/insurance industries.
Among those sins many of us were happy to take advantage of the system that allowed us to borrow more than our assets were worth or to take on adjustable rate loans all with the mindset that our lives/income could only improve.  To sum up, we’re not exactly victims here – we are part of the problem, so do we stand up and take part of the solution?
During World War II we had war bonds and were encourage to invest in our country that way.  What if we were asked, as patriots, to spend 1-5% each month on discretionary items?  The campaign could show Uncle Sam with a shopping cart or a new handbag, pointing his cash directly and asking us to spend our way to recovery.  Would that be so bad when its really what we want to be doing anyway?  As long as we didn’t put it on a credit card, would it really be that bad?

Even if you’re not American the issue is still being measured in every country that has gone through this crisis with us.  Are jobs stable?  Are people spending, saving or paying off debt?  Are ‘things’ being manufactured? 

I’m curious, what do you think?  Which side do you take? Are there arguments that I missed?  Or does this simply raise other thoughts for you?  (Like, we don’t have to spend as long as our increase in spending stays in the headlines because it’s all about perception anyway.  )

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